Crypto Market Drops as Powell Says December Rate Cut Is “Far from Certain”

After weeks of optimism, investors were hit with a dose of reality. Jerome Powell, Chair of the U.S. Federal Reserve, sent shockwaves through the crypto market and broader financial world with his latest comments.

Speaking after the FOMC (Federal Open Market Committee) meeting, Powell stated that another rate cut in December is “far from certain.” His words immediately triggered a sell-off in Bitcoin and Ethereum, as traders who had bet on continued monetary easing began to reassess their positions.

Powell Signals End of the Easing Cycle Powell acknowledged that the U.S. labor market is showing signs of weakness, while inflation remains elevated.

Despite indications of slowing growth, he said that the overall economic outlook has not changed significantly, adding that higher tariffs are putting further pressure on prices and complicating the Fed’s balancing act between growth and inflation. “Another rate cut at the December meeting is not a given — far from it,” Powell emphasized. His remarks effectively ended investor hopes for another policy stimulus this year and signaled that the Fed may be ready to pause its rate-cutting cycle.

Fed Ends Quantitative Tightening The Fed also announced that it will halt the runoff of its balance sheet starting December 1, saying reserves have now reached a level of sufficient liquidity.

Powell explained that repo rates and funding costs have recently increased, prompting the Fed to end its quantitative tightening (QT) program. This move means the central bank will stop shrinking its balance sheet, but is unlikely to cut rates further in the near term until inflation clearly moves closer to the Fed’s 2% target. The decision marks the end of one of the most complex monetary policy phases in recent years, as the central bank tries to manage slowing growth without reigniting price pressures.

Bitcoin and Ethereum React with Declines Markets reacted quickly.

According to TradingView, Bitcoin fell 1.49% to $111,237, while Ethereum dropped 1.07% to $3,937.

Both cryptocurrencies erased earlier gains within minutes of Powell’s statement. Investor sentiment shifted abruptly: optimism about a continued easing cycle gave way to concern that the Fed’s pause could extend into next year.

Risk Appetite Fades Across Markets Traders interpreted Powell’s comments as a clear warning that no further rate cuts should be expected this year.

This stance immediately reduced the appeal of risk assets, including cryptocurrencies. At the same time, U.S. Treasury yields rose and the dollar strengthened, leading to a broader decline across global markets. Crypto assets, often considered high-risk investments, followed the same downward trajectory.

Bitcoin May Repeat Its Post-FOMC Pattern Despite the short-term pullback, analysts noted that Bitcoin has historically rebounded after Fed meetings.

In several recent cases, Bitcoin dropped following FOMC statements, only to recover and reach new highs before the next policy decision. If this pattern repeats, Bitcoin could once again move toward the $120,000 range ahead of the December meeting, though market conditions remain uncertain and heavily dependent on the Fed’s next steps.

#bitcoin , #Ethereum , #Powell , #FederalReserve , #Inflation

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